Even as some court watchers have said that the U.S. Supreme Court's recent decision to review a U.S. EPA preconstruction permitting program for greenhouse gas emitters came out of left field, at least one industry lawyer said the high court's move makes perfect sense.

"I am not totally surprised," said James Rubin, a lawyer at Dentons US LLP who practices environmental and natural resource law.

Given the composition of the court alone, it was naturally inclined to take up such a case, Rubin said Oct. 15. Four of the nine sitting judges, who tend to lean to the conservative side, "dissented pretty strongly" in Massachusetts v. EPA, which found that greenhouse gases meet the Clean Air Act definition of an air pollutant. It was in that landmark case that those justices found themselves in the minority.

Rubin said review of the case also follows a logical progression of the EPA's greenhouse gas regulatory regime. Whereas in Massachusetts v. EPA the Supreme Court examined the EPA's authority to regulate greenhouse gases, the case at hand involves the agency's development of such rules based on its interpretation of the statute.

EPA's GHG permitting program 'very controversial'

Rubin said the area to be examined by the Supreme Court is "very controversial" and therefore was predisposed to be taken up for examination by the justices. In applying preconstruction permitting requirements to stationary sources of greenhouse gas emissions, the EPA had to "jump through a lot of hoops" that amounted to a "rewriting of the statute by regulation," he said.

One of those "hoops" was the EPA's tailoring rule in which the agency set an emissions threshold above which the rules kicked in to avoid the application of the standards to thousands of smaller sources. That the EPA had to tailor the application of the rules, the industry argues, is evidence that greenhouse gas emitters were never intended by Congress to be subject to such permitting requirements. Industry petitioners had argued that it was only with criteria pollutants, subject to the National Ambient Air Quality Standards, that preconstruction permits were required.

Request for review of endangerment finding was a dud

Rubin said that by contrast, some other issues for which the industry sought review were less controversial, including the endangerment finding.

In Massachusetts v. EPA, the court held that the EPA must base a decision to regulate greenhouse gases on whether the pollutants can be reasonably anticipated to threaten public health and welfare, which the agency subsequently determined in its endangerment finding.

While politically controversial, Rubin said the endangerment finding is ultimately an "inherently scientific determination," which works in the EPA's favor.

"The court would have to overrule EPA on the science. That is very difficult," he said.

Rubin recalled that the EPA had "plenty of evidence" to make its finding that greenhouse gases endanger public health and welfare and that there was only a minority opposing the science behind anthropogenic climate change.

Rubin said the industry petitioners' best argument was that the EPA's practice of basing its endangerment finding off other reports, such as the Intergovernmental Panel on Climate Change, is "not very strong."

In the end, the bar for successfully challenging the EPA's endangerment finding is high. Rubin said the EPA was not required to show that it was right and that everyone was wrong on climate change but merely that the EPA's interpretation of the science was reasonable.

Supreme Court's review of case a surprise to some

Jennifer Smokelin, an environmental and energy lawyer at Reed Smith LLP, was on the other side of the debate.

"I thought they were not going to take [the case] up on appeal. I am as surprised by this as anybody," she said in an Oct. 15 phone interview.

While acknowledging the fact that the dissenters in the Massachusetts v. EPA were still present, she said that if the court were to grant review, it would have done so for what she said is the more legally vulnerable tailoring rule.

"They didn't pick what I would call the slam dunk issue, which was the tailoring rule," Smokelin said. "They chose a more difficult issue and arguably an issue that they reached out and plucked themselves."

Smokelin said the high court's move to review the case is a "firm statement" that regulation of greenhouse gases from stationary sources is a "very important and very complex issue." To put it in perspective, the court receives several thousand petitions for a writ of certiorari each year, while it grants and hears oral argument in only about 80 cases.

Smokelin and others also said they were surprised the Supreme Court took up the case for review given the strength of the sweeping ruling by the U.S. Court of Appeals for the D.C. Circuit. In its June 2012 unanimous decision, the D.C. Circuit reaffirmed the scope of the U.S. EPA's authority to regulate greenhouse gases.

Rubin added that because the Supreme Court had not ruled on the industry's petitions in its first few conference sessions, it had appeared as though it would not take up the issues at all, and the regulations "might be out of the woods."

Limited impact?

Environmental groups have gone to great pains to emphasize that the preconstruction permitting requirements for new and modified sources of greenhouse gas emissions that are under consideration have no bearing on forthcoming greenhouse gas new source performance standards, or NSPS, for new and existing power plants.

Observers say the preconstruction permitting process is lengthy, expensive and opens the door to yet more scrutiny from the EPA and challenges by environmental groups. But for all the headaches that may come with obtaining a preconstruction permit, Rubin said there are much bigger, substantive regulations like the forthcoming NSPS.

Nevertheless, some are already attempting to predict the outcome of the case. But Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School and senior counsel at Arnold & Porter LLP, said court watchers should not make too much of the partisan stripes of the sitting justices to handicap the court's ruling. He said that because the case is more legal and technical and deals with statutory interpretation rather than a social philosophy, the ruling is less likely to break down along political lines.

"This comes down to how the justices read the language of the statute. It is legal, technical," Gerrard said in an Oct. 15 phone interview. "It is more the mechanics of the wording of the Clean Air Act."

The case the Supreme Court will review is Utility Air Regulatory Group v. U.S. EPA (12-1146 et al.). The court declined to review challenges to the EPA's endangerment finding and other issues raised in several other cases, including Coalition for Responsible Regulation Inc. v U.S. EPA (12-1253 et al.)